2010 Brazil - Telecoms, Mobile, Broadband and Forecasts

Brazil is the largest market in Latin America and the region’s leading investment destination for international operators and suppliers.

With the country’s economic recovery well under way, the spending power of Brazilian consumers is on the rise. Demand should remain strong for telecom services, especially broadband and mobile telephony. Brazil’s regulator Anatel has an ambitious agenda to overhaul the country’s regulatory framework.

Brazil’s fixed-line teledensity is slightly higher than average for Latin America, which is in line with other indicators such as the country’s GDP per capita, also slightly higher than the regional average. As in the rest of the world, fixed-mobile substitution is a prominent phenomenon in Brazil, with an increasing proportion of the population using mobile rather than conventional telephones.

Brazil is home to almost one third of all mobile subscribers in Latin America. The country’s mobile penetration is about average for the region, but varies considerably from state to state. Number portability is helping to increase competition in an already highly competitive market.

Demand for broadband in Brazil is expected to soar. Broadband operators have been struggling to keep up, and there have been problems of system overload. The government has plans to spread broadband across the vast country in one of the world’s largest infrastructure projects. Two major factors have inhibited the growth of broadband in Brazil: shortage of fixed-line infrastructure, and broadband prices, which are too high for the Brazilian socio-economic environment. On the other hand, the growth of mobile broadband in Brazil has been nothing short of spectacular, attracting more than four million subscribers.

Convergence is popular in Brazil, with numerous operators advertising triple play solutions that include broadband, telephony, and pay TV. Brazilian companies have generally approached triple play by adding VoIP to pay TV and broadband. Several operators also offer services based on fixed-mobile convergence. A draft bill is in the pipeline to allow IPTV services, which are prohibited by Brazilian telecom regulations.

Markets highlights:

·         Brazil’s regulator Anatel has an ambitious agenda to overhaul the country’s regulatory framework. The General Plan for Updating Telecom Regulations, known as PGR, includes lists of actions to be carried out in the short, medium, or long term. Among others, there are plans to develop Open Networks in the country through local loop unbundling and through structural or functional separation regulations.

·         The regulator is planning several public consultations and new spectrum auctions for 2010, involving, among others, frequencies relinquished by Oi (Band A), spectrum never allocated (Bands D and E), the last remaining 3G licence (Band H), spectrum in lower frequencies such as 450MHz-470MHz, and spectrum for mobile operators in the 2.5GHz band.

·         Brazil has been the regional leader in terms of smart energy technologies. Several power companies have installed electronic meters – albeit with only the same functionalities as electromagnetic meters: the measuring of active energy. The shift to electronic meters was prompted by the fact that they had become cheaper than conventional meters. The main purpose for the installation was to reduce energy theft.

·         The demand for broadband and the success of 3G in Brazil augurs well for Long-term Evolution (LTE), also known as 4G mobile. The 2.5GHz frequency band to be auctioned in 2010 could be used for LTE. Telefónica is conducting LTE field tests in Brazil, and the country’s four major mobile operators (Vivo, Claro, TIM Brasil, and Oi) may be ready to launch LTE services commercially by end-2012.

Brazil – key telecom parameters – 2008-2009

(Source: BuddeComm based on industry data)

For those needing an objective and high-level strategic analysis on Brazil, this report is essential reading and gives further information on:

·         Regulatory framework and Anatel’s General Plan for Updating Telecom Regulations, known as PGR.

·         Mobile market outlook and developments, including planned spectrum awards.

·         The success of 3G and mobile broadband in Brazil.

·         Broadband market trends and plans to spread broadband across the vast country.

·         The outlook of WiMAX and LTE in Brazil.

·         How different scenarios are likely to affect the fixed-line, mobile, and broadband markets in the ten years to 2020.

Data in this report is the latest available at the time of preparation and may not be for the current year.